In the U.S. (which accounts for 76 percent of total Group sales), same store sales were down 9.7 percent for the year, led by a drop in same store sales in the fourth quarter of 16.1 percent. Total sales for the fiscal year were down 6.3 percent to $2.53 billion.

In the U.K. (which accounts for 24 percent of total Group sales), same store sales were down 3.3 percent. Total sales fell 15.7 percent to $808.2 million. At constant exchange rates, the decline was 3.8 percent.

The company said there was a steep decline in sales among wealthy consumers in both its markets.

For 2010, Signet says it plans a number of capital reduction and cost cutting initiatives, including a plan to cut $100 million from its U.S. operations.

“As sector rationalization continues at an accelerated pace, proven management, a strong balance sheet and sustainable competitive advantages are important considerations in relationships with staff, suppliers and landlords,” Burman said. “As we enter fiscal 2010, our prime objective is to strengthen further the Group’s industry leading position so as to be able to benefit from the reduced capacity within the specialty jewelry sector and to be well positioned for the eventual consumer recovery. To reinforce our position, we also aim to reduce net debt by around $200 million in fiscal 2010.

Burman continued: “Given the very challenging environment, the Group has made an encouraging start to fiscal 2010. In the U.S., same store sales for the first seven weeks were down by 2.7 percent against the comparable period in fiscal 2009, with Valentine’s Day trading stronger than the remainder of the period. The change in timing of Easter had an adverse impact of about 1 percent. Gross merchandise margin was meaningfully up, reflecting the benefit of the price increases implemented in the first quarter of fiscal 2009 and favorable mix changes, which more than offset the increase in the cost of gold.”

In fiscal 2009, Signet said its loss before income taxes was $326.5 million (fiscal 2008: income $336.2 million), including a goodwill impairment charge of $516.9 million and non-recurring relisting costs of $10.5 million. Before these items, the Group’s income before income taxes was $200.9 million.

Signet’s goodwill impairment charge is related to company moving its listing from the London Stock Exchange to the New York Stock Exchange. Its explanation of the charge is as follows:

“In prior years, the Group prepared its accounts under International Financial Reporting Standards (“IFRS”) and reflected on its balance sheet only $30.6 million of goodwill relating to an acquisition made in 2000. Following the move of listing to the New York Stock Exchange (“NYSE”) and the adoption of US Generally Accepted Accounting Principles (“US GAAP”), goodwill of $486.3 million relating to acquisitions made by the Group in 1990 or earlier was also required to be reflected on the balance sheet.

“Under US GAAP, the Group is required to undertake an annual goodwill impairment test at its year end or when there is a triggering event. In fiscal 2009, in addition to the annual impairment review there were a number of triggering events in the fourth quarter due to a significant decline in profitability reflecting the impact of the economic downturn on the Group’s operations and an even greater decline in its share price resulting in a substantial discount of the market capitalization to tangible net asset value (that is shareholders’ funds excluding intangible assets). An evaluation of the recorded goodwill was undertaken and it was determined that it was impaired. Accordingly, to reflect the impairment, the Group recorded a non-cash charge of $516.9 million, which eliminated the value of goodwill on its balance sheet. The goodwill write-off has no impact on the Group’s borrowing agreements or the net tangible assets of the Group.”